The order books are thin, the fundamentals are bullish, and just a few days after hitting $23 K Bitcoin has plowed through $24 K. Now the bulls have their eyes set on $25 K.
A Christmas Miracle?
Though Bitcoin made headlines this week with its run through $20K and then $23K, it seemed like the mainstream media was only starting to pick up on the momentum. While hodlers who bought BTC at the time at $19,000 are finally feeling that sweet relief about three years later, the fundamentals this year are different.
The 2020 market, overall, has one of the biggest upward pressures on Bitcoin’s price: the pandemic. Digital payments are more necessary than ever with social distancing, and the US federal government is planning a second trillion-dollar stimulus package that is likely to cause inflation. To many, USD doesn’t seem as appetizing at it once did.
Then there’s the major Wall Street firms. Microstrategy and others have added millions of dollars in BTC to their treasuries and Grayscale Investments’ cryptocurrency trusts have seen phenomenal growth. Some feel it is only a matter of time before giant corporations follow suit.
Then there’s the retail side. Users can now buy Bitcoin over the huge Paypal network. It is noteworthy that BTC’s market cap is at press time $447 billion dollars, a mere $80 billion dollars larger than America’s largest bank J.P. Morgan.
With the rise of DeFi, banks are actually being challenged as users can find decentralized loans and decent interest rates on their cash savings. Then there’s the lower number of active addresses and the low amount of BTC on exchanges, suggesting that people are hodling.
Most of all, crypto traders both retail and institutional are drawn to these massive gains. The all-time-highs have been broken, and day after day they are breaking themselves.
Some have speculated that we could see $25,000 Bitcoin by Christmas. With the holiday less than a week away, this does not seem outlandish.
Running Out of Steam?
While those gains are appetizing enough, the exuberance of 2017 is being felt on Twitter. Popular video blogger IvanOnTech half-heartedly suggested that BTC could reach $30K by Monday. That would certainly make a memorable re-tweet, should it come to fruition.
But the current price could be near the top, at least for this week. Market timing guru Tom DeMark told Marketwatch he believes the Bitcoin rally is out of steam.
When Bitcoin broke through the psychological barrier of $20,000, many claimed that Bitcoin was in price discovery. In a nutshell, price discovery asks how high (or low) Bitcoin can go. It is a nice concept, and who wouldn’t want to discover the “true” market price?
Billions of dollars are coming out of everywhere to pump the price even higher. 2017’s bull run saw a pump in the market around Christmas and Thanksgiving as crypto-lovers explained the merits of blockchain at family dinners. This year, sadly, is going to look different. But whether this will be a pleasant surprise or not remains to be seen.